Drawing Your Social Security


State employees approaching retirement face a tough but critical decision: When to begin drawing Social Security benefits. For the oldest of baby boomers, the retirement age for full benefits is 66. Social Security beneficiaries can opt to start benefits as early as age 62, but the tradeoff for this option is a lower monthly benefit check for life. Conversely, one can delay the start of benefits up to age 70 and receive larger monthly benefits. On average, it’s not supposed to matter.  Retirees on average receive similar lifetime benefits whether they start early or later. But who is average? Live longer than average, 80 to 90, and you would be better off delaying your benefits. If you kick the bucket at age 64 you would have been better off starting at age 62. When to start your benefits is a gamble for everyone.

Everyone approaching retirement should consider a variety of factors to determine when it is best to start drawing social security benefits. The main factor, and the most difficult to know, is how long will you live. Social security is a game of life expectancy. If your family health history suggests your retirement is likely to be short, then it may be wise to grab benefits when you can. Some may not have a choice since they need the social security benefits at age 62 to make ends meet. Some may choose to draw at age 62 because they feel they can simply get more enjoyment out of the increased monthly income at a younger age rather than waiting until later when their health might not be as good. Some may elect to draw social security at age 62 and invest the money
if the monthly Social Security income is not needed for living expenses. This strategy may work if you are a disciplined investor and you do not spend the benefits until after normal retirement age.  If you are not an investor and you have a long life expectancy your best option may be to wait until age 66 or age 70 to draw your benefits.

State employees should remember they will need enough income to live on comfortably during their retirement, so it is to their benefit to stretch every penny from every income source including Social Security. For more information and assistance, visit the Social Security Administration website at http://www.ssa.gov/.


Originally published in the July 1, 2007 Newsletter.

Reviewed April 2017

Return to Index